Behind Closed Doors: Edtech Entrepreneurs’ Biggest Challenges in 2018

AT&T Aspire Accelerator participants

If you’ve ever wondered what goes on in an edtech company’s board meeting, or what keeps founders up at night, here was your chance to find out. Earlier this month in New York City, the AT&T Aspire Accelerator, AT&T’s program that finds, develops, and invests in promising edtech companies from around the world, hosted an afternoon of mock board meetings with its 2018 cohort.

To date AT&T has made 27 investments. (Fifty-nine percent of these organizations are founded or led by a woman, and 44 percent are founded or led by a founder of color.) Collectively, these companies have reached over 12 million students and have raised an additional $20 million after AT&T’s initial investment.

The program’s fourth and latest cohort include:

Caribu (Miami) allows any trusted adult to read and draw with children, through an interactive video-call, no matter how far apart.

Words Liive (Washington, D.C.) makes it effortless for teachers to integrate music into lessons.

Zoobean (Arlington, Virginia) provides a web application, mobile app, and prospective hardware device through which families can track their independent reading and stay motivated to read.

Given each company’s distinct offerings, uniquely different target markets and varying stages of maturity, their needs and challenges varied. But overall the question that everyone wanted to address was the same: How does a company achieve scale?

Here were the tips that the mock board members, comprised of education technology investors and founders, had to offer.

1. Don’t reinvent the wheel

Every first-year teacher gets told not to reinvent the wheel with good reason; there are ample resources already created by veteran peers, and it isn’t worth the new teacher’s time to start creating instructional resources from scratch—instead of focusing that time on doing other tasks demanded like grading essays or honing classroom management skills.

Scaling a business to profitability while operating on a freemium model is nearing urban myth status.

The same principle applies to edtech companies. If fast growth and lean operations are the goals, then they need to limit their labor creating content and instead work to repurpose existing educational resources. For example, in the case of literacy companies in the market today, articles from around the web are curated and categorized by reading level, alignment to state academic standards, topics and connection to commonly-taught texts to give educators and students access to “real world” content.

Similarly, AT&T Aspire’s Words Liive combines excerpts from popular songs and classic literature to allow teachers to create engaging, culturally relevant lessons. In both cases, the bulk of the content is already exists, and the edtech companies are building upon these materials so they don’t have to create new content.

2. Don’t try to beat ‘em. Join ‘em.

When thinking about how to grow a business, entrepreneurs must first take a close look at the competitive landscape. How do they stack up with other companies in their space, against whom they’re competing for customers?

Companies all want more eyeballs and users. But that doesn’t necessarily mean they need to compete with one another. To scale in 2018, companies need to look to others in their spaces and see how they can build bridges to work together to support each other’s growth, instead of looking for ways to cut each other down. Companies that succeed understand the importance of partnerships. In the most notable African proverb, “If you want to go fast, go alone. If you want to go far, go together.”

For example, when Words Liive was asked about how they compare to Flocabulary, a seeming competitor, Words Liive’s founder and president, Sage Salvo, replied that although both programs use hip hop for instruction, they’re “much better complements in a classroom than competitors.” At first glance, this may read as words from a founder with rose-colored glasses firmly perched on his nose, but this type of thinking—and optimism about how edtech companies can support each other—can lead to powerful partnerships.

3. Don’t fear freemium

Scaling a business to profitability while operating on a freemium model is nearing urban myth status. You’ve heard murmurs of a company of being able to convert free users to paying customers—but have yet to see it for yourself. That said, freemium can come in a lot of different forms, and when used correctly can lead to the teacher visibility that it takes to create a groundswell to get to district and school level sales.

...companies need to narrow down on the number of strategic goals on which they focus—and equally important, measure outcomes.

As the AT&T Aspire founders considered what they can and can’t give away, Jay Rappoport, a sales representative at Speakaboos, counseled that for a young company with a great, but largely unknown offering, their “content is their currency.” A startup in this position may not have massive marketing dollars, but they may have inexhaustible content that’s already been created. Instead of spending money (they don’t have) to build a following, such companies can capitalize on their content.

Freemium can also be crucial for companies releasing a product that‘s entering new territory and created without precedent. In order to attract educactors to such a tool, these potential buyers have to be able to experience it to understand it, given that they have no point of reference for what it’s doing or how it’s doing it.

4. Give users what they want, sometimes even before they know they want it

One of the biggest challenges for an ed tech company is getting their foot in the door. One way to increase the chances of that is to give prospective clients exactly what they want.

By customizing curricula for Teach For America’s Memphis region, Words Liive was able to partner with the teacher recruitment organization on their upcoming cultural arts integration trainings using Words Liive’s new platform. They adopted a similar strategy in Maryland, offering schools quizzes that aligned to the state’s high-stakes assessment. This alignment of goals facilitated an arts integration partnership for the upcoming school year in multiple counties in Maryland.

Founder Sara Potler LaHayne of Move This World took a different route to address her users’ needs; she anticipated them. She began her company, which offers movement-based social-emotional learning (SEL) modules, over a decade ago—before SEL was recognized as a need by anyone or the market.

Although few at the time shared LaHayne’s belief SEL was crucial for student success, that did not deter her. She persisted, knowing that eventually district administrators would come to recognize the value of a product like hers. Today, with the focus of education on developing the whole child—including the social and emotional aspects of learning, LaHayne’s work is finally finding a receptive audience.

5. Cast a wide net while maintaining clear focus

“You can focus on growth, or you can focus on revenue. If you focus on both, both are slowed down,” Speakaboos’ Jay Rappoport counseled. In other words, companies need to narrow down on the number of strategic goals on which they focus—and equally important, measure outcomes.

That said, those paths are not fixed in stone. Startups need to be nimble, and should not get too fixated on just one set of potential customers, one sales strategy, or one funding source. Successful companies grow by taking a broad view of their market and using varied approaches to sales.

Specifically, startups were advised to avoid recreating a 2018 version of door-to-door sales, which would mean marketing and selling to individual schools, districts or homeschool buyers. Instead, advisors suggested exploring partnerships with large buying cooperatives, where their time investments help scale their efforts more effectively.

Nasir Qadree (@NasirQadree) is the Associate Director of Social Investments at AT&T. Colette Coleman (@ColetteEdReform) is Director of Business Development at Zinc Learning Labs.